When thinking about scams, most people think, “That will never happen to me,” “How did someone fall for that,” or “Why would someone send money or handle their finances like that?”. But the truth is, most people don’t see it coming. The worst part about scams is what makes them so successful: you won’t know it’s happening until it’s too late. Then come the effects of being scammed which extend far beyond the loss of time, money and the possibility of your contact information being sold to other scammers. In extreme cases, the scam that unknowingly traps you might be engaging in criminal activity, meaning you can be charged as a criminal for it too.
Don’t be the person who thought “It will never happen to me.” Instead, take the time to understand some of the most common scams and schemes to learn how to protect yourself against them.
Pyramid Schemes
Pyramid schemes are a step above the typical scam. A pyramid scheme relies on recruiting new money and people, who then “need to” recruit additional money and people. A true pyramid scheme is a business in which the only income is from new recruits who provide earnings to those who have been in the scheme longer. Once the pool of new candidates are exhausted the scheme collapses. These types of investments are highly illegal.
Work-At-Home Scams
We all know the “But wait, there’s more!” slogan when it comes to infomercials, but what about the ads that say “Make lots of money working from the comfort of your home”? Unlike the infomercials, these ads are most likely scams. Work-at-Home scams are known for promoting or marketing work just to take your money, not pay you the money. The promoter will charge you fees, charge you for products or make you purchase inventory or equipment and then fail to provide you with any real income potential. These scams cause a detrimental loss of money.
Advance-Fee Schemes
An advance-fee scheme is when someone contacts you usually by email, phone or mail, and convinces you are eligible for a larger sum of money, but you need to pay them an advance fee in return for access to the money. These scams are usually something of greater value like lottery winnings, “found money” or various products. The schemer usually offers a financing arrangement with a “fee” acting as a finder’s fee. As the scheme progresses you will soon learn you’re not eligible for the money and will not be reimbursed for the fees you paid.
Money Transfer Schemes
A money transfer scheme is quite similar to an advance-fee scheme, except here the scammer promises to transfer money to you via your bank account, tells you to keep a small “commission” and then asks you transfer a portion to some other party. While the “commission” sounds incentivizing, the scammer only wants access to your bank account information so they can illegally transfer your funds. The transfers are difficult to trace, and usually, the lost money will never be found.
Telemarketing Scams
How many times have you picked up a phone call from an unknown number? Following that call, chances are you blocked those numbers or put yourself on a “do not call” list. No matter how many times you put yourself on that list, phone scammers may have already grabbed a vast amount of information about you from other telemarketers, making it quite easy for them to contact and scam you. Best way to avoid these scams: don’t answer calls from unknown numbers. It if is a valid call, the caller will leave a voicemail message.
Investment Scams
Time after time, we hear about the big, bad investment scams that most just shake their heads at and wonder why no one saw the ridiculousness happening sooner. No matter how you prepare, investment scams seem to always persist. The reason for this – they work. Investment scams take on many forms, some being more destructive and some are smaller, less likely to be detected early. Investment scammers are smart, but it’s important to educate yourself so you can outsmart the scam and keep your finances secure. Ask lots of questions, and insist on seeing the investment literature before investing. There are many government agencies who can help you avoid these scams.
Be careful, educate yourself on the different scams and when it comes to your finances, make sure you have all of the facts prior to agreeing to anything. As the saying goes, the best defense is a strong offense. Build your offense with financial knowledge, plans, and skills to protect your finances against scammers. Never feel rushed into making an investment decision.
Ready to protect your finances?
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